When using WooCommerce Payments, you have two options to sell subscription products:
This document explains the differences between the two options, including features and pricing, to help choose the best option for different needs.
Overview ↑ Back to top
WooCommerce Payments’ built-in subscription functionality provides free access to the features required to sell subscriptions products and services in your store. The functionality is bundled with WooCommerce Payments and you pay as you go for usage through an additional fee that is added to each subscription-related transaction.
The WooCommerce Subscriptions extension provides access to more features, including support for dozens of different payment gateways. Access to these features requires an annual subscription via WooCommerce.com and one or more separate plugins to be installed and active on your site. After that upfront fee, only the payment gateway’s fees are charged on subscription-related payments – there are no additional usage fees added by WooCommerce Subscriptions.
Which solution is right for me? ↑ Back to top
The most suitable subscription solution for your business will depend on the following factors:
- Preferred payment methods: If you want to offer your customers the option to subscribe using their PayPal wallet or various other payment methods, the WooCommerce Subscriptions extension is required. Only credit and debit cards can be used to pay for subscriptions with WooCommerce Payments.
- Required features: WooCommerce Payments provides essential subscription functionality for a recurring revenue model. WooCommerce Subscriptions provides additional advanced features that may be required for certain subscription models, like support for subscribers upgrading their subscription with a prorated fee or signing up without a payment method.
- Recurring revenue amount: If your business expects to process more than $19,900 of subscription-related payments in the next 12 months, the upfront cost of the WooCommerce Subscriptions extension will be more economical than using subscriptions with WooCommerce Payments and paying subscription-related transaction fees.
In general, the subscriptions functionality built into WooCommerce Payments is best suited to stores testing out a new recurring revenue model, while the WooCommerce Subscriptions extension is best suited to larger stores or businesses built with a subscription model at their core, like a membership site.
Features ↑ Back to top
Billing engine ↑ Back to top
With WooCommerce Subscriptions, automatic recurring payments are initiated on your site, then processed by the payment gateway. This turns your WordPress site into a recurring billing engine that is completely within your control. This is referred to as an on-site billing engine.
An alternative approach is to have recurring payments initiated at the payment gateway. After the payment is initiated, the payment gateway then notifies WooCommerce about the payment so it can record the transaction in an order. WooCommerce can also take other necessary action, like emailing the subscriber a notification of the order. This is referred to as an off-site billing engine.
The built-in subscriptions functionality in WooCommerce Payments uses an off-site billing engine. This makes it possible to provide a greater level of reliability in collecting recurring revenue, because the billing system is controlled by the team at WooCommerce and our payment partner.
Importantly, when using the WooCommerce Subscriptions extension with WooCommerce Payments as a payment method, for subscriptions purchased with the extension active, automatic recurring payments will be initiated on your site rather than using the off-site billing engine.
Extension compatibility ↑ Back to top
In addition to differences between built in functionality, the two offerings also have different compatibility between add-on extensions, like All Products for WooCommerce Subscriptions.
It is possible for many extensions that add features to WooCommerce Subscriptions to also add those features to WooCommerce Payments’ built-in subscription functionality. However, not all extensions are or can be compatible.
Learn more about extension compatibility in the FAQ on which add-ons are compatible with subscriptions built-in to WooCommerce Payments.
Transaction fees vs. annual subscription ↑ Back to top
A key difference between using WooCommerce Payments built-in subscription functionality and the WooCommerce Subscriptions extension is the pricing model.
The WooCommerce Subscriptions extension is available by paying an annual subscription fee. After that upfront fee, only payment gateway fees are charged on subscription-related payments. There are no additional usage fees added by WooCommerce Subscriptions.
WooCommerce Payments’ built-in subscription functionality is available without any upfront fee. It is bundled with the WooCommerce Payments plugin that is freely available. Instead of an annual subscription, you pay for usage through an additional fee on each subscription-related transaction.
Because of fixed annual cost vs. variable cost model, if your business expects to process less than $20,000 of subscription-related payments in the next 12 months, subscriptions with WooCommerce Payments will be more economical than using WooCommerce Subscriptions.
Changing subscription options ↑ Back to top
If you are already using one subscription offering and want to move to a different option, refer to the guides on: